Bank of Korea's New Foreign Asset Management System Integrates Technology and Processes to Increase Liquidity, Stability and Profitability of Korea's Foreign Exchange Reserve


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SEOUL, KOREA - 18 May 2005: Bank of Korea and IBM today announced the completion of the transformation of the Bank of Korea's foreign exchange asset management system for foreign exchange reserves. The new system designed, developed and implemented by IBM Korea, delivers business efficiencies, minimizes risk and provides greater visibility into the performance of the central bank's foreign reserves -- the fourth largest in the world.

The new system aligns and automates the Bank's front, middle and back-office processes and systems associated with foreign exchange trading, delivering dramatic improvements in operational continuity. The system supports current and future financial instruments, delivers improved financial product management, investment strategy development, deal and decision support, portfolio analysis, performance evaluation, straight through processing for settlement and accounting and risk management, and improved data migration between front and back office.

According to Mr. Tae-Youn Chung, Deputy Director General, Bank of Korea, "By better managing Korea's foreign exchange reserves and boosting the performance of our foreign exchange trades, we will be able to increase foreign reserves and continue to build Korea's economic status in the global marketplace."

The Bank's traders are provided with enhanced analytical capabilities including real time analysis and simulations involving changing risk factors such as foreign exchange rate, market price and volatility. The performance of trades can then be evaluated against an enhanced set of criteria, across multiple trades and to the global time weighted rate of return standard.

The automation of business processes and data interfaces has improved the accuracy of data, halved the number of accounting processes, systemized the management of future margins and secure fee transfers, simplified the issuance of SWIFT* messages and reduced the time associated with the aggregation of market data.

On the completion of a trade, the new system provides the trader and the bank's risk managers with limit reports, ensuring compliance to the bank's risk management procedures.

"The new foreign exchange asset management system integrates the technology, processes and people of the Bank of Korea to focus on their objective of increasing the liquidity, stability and profitability of the Korean foreign exchange reserve," said Hwi Sung Lee, Country General Manager, IBM Korea.

"The Bank of Korea can now operate and trade foreign exchange faster, simpler, smarter than was previously possible following the traditional model where business processes and IT aren't integrated," he said.

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